Ericsson has entered an agreement to acquire cloud communications provider Vonage for $6.2 billion.
Ericsson intends to expand its wireless enterprise offerings globally and offer existing customers an increased share of a market that’s set to hit $700 billion by 2030. Ericsson’s acquisition of Vonage will help it achieve that goal.
Börje Ekholm, President and CEO of Ericsson, says:
“The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business.
The acquisition of Vonage is the next step in delivering on that strategic priority. Vonage gives us a platform to help our customers monetise the investments in the network, benefitting developers and businesses.
Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of 8 billion connected devices. Today we are making that possible.”
Vonage was founded in 1998 as a Voice over IP (VoIP) exchange focused on replacing landline phones.
Starting in 2013, Vonage began acquiring numerous companies – including Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) firms – to support its transition into a global business cloud communications provider.
“Vonage’s strong developer ecosystem will get access to 4G and 5G network APIs, exposed in a simple and globally unified way. This will allow them to develop new innovative global offerings. Communication Service Providers will be able to better monetize their investments in network infrastructure by creating new API driven revenues,” added Ekholm.
“Finally, businesses will benefit from the 5G performance, impacting operational performance, and share in new value coming from applications on top of the network.”
The merger agreement was approved unanimously by the Board of Vonage.
Rory Read, CEO of Vonage, commented:
“Ericsson and Vonage have a shared ambition to accelerate our long-term growth strategy. The convergence of the internet, mobility, the cloud and powerful 5G networks are forming the digital transformation and intelligent communications wave, which is driving a secular change in the way businesses operate.
The combination of our two companies offers exciting opportunities for customers, partners, developers and team members to capture this next wave.”
Ericsson says its latest acquisition complements its purchase of Cradlepoint last year. Subject to regulatory and shareholder approval, Vonage is expected to come under Ericsson’s wing in the first half of 2022.
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